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Caffè Nero defies tough UK trading with sustained sales growth

UK’s third-largest coffee shop chain posts like-for-like sales growth of 2.5% for the year ending May 31, 2018 despite tougher UK trading conditions
Caffé Nero bucks the UK high street trend with 82 consecutive quarter of sales growth

Caffè Nero has posted its 82nd consecutive quarter of UK growth, with like-for-likes up 2.5% for the year ending May 31 2018. Group sales at the coffee shop chain were up 10%.

The results contrast with high street rival, Costa Coffee, which posted a 2% drop in like-for-like sales in June 2018. Costa, the UK’s biggest coffee shop chain, said “well-publicised consumer trends” had contributed to the flattening of its UK sales.

UK high street trading conditions have toughened in the past 12 months as lower footfall causes major retail and F&B brands, such as Marks & Spencer, Waitrose, Jamie’s Italian and Byron to close sites. In July 2018, Argentinian F+B chain, Gaucho, announced the closure of all its 22 UK branches with the loss of 540 jobs. Coffee shops have, however, shown resilience to the downturn and continue to add stores according to Allegra research.

Caffè Nero’s positive results will further validate its sales strategy, which has focussed on customer experience via initiatives such as a rapid payment and loyalty app and delivering improved food options across its 690+ UK sites. In March 2018 the chain credited this strategy with driving like-for-like sales growth of 2.8 % between 1 June 2016 and 31 May 2017.

In April 2018, Caffè Nero announced its first profit in the Republic of Ireland after three years’ operation in the country. The UK’s third-largest coffee shop chain also opened 75 new stores globally during the period, including in the USA, where it now operates 24 stores. Its total global portfolio now stands at 885 sites.
 

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